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Book Summary/Review: Creating Tomorrow’s Organisation

This article is based on the following book:
Creating Tomorrow’s Organisation
"Unlocking the Benefits of Future Work"
by David Birchall and Laurence Lyons

Printed with permission from:

New organisational trends and fads are a big business. If you manage to introduce one, you can be assured of lucrative lecturing and publishing deals. You cannot avoid thinking these realities of modern consulting as you read how Birchall and Lyons try to glue together ideas like teleworking, hotdesking, networking, distributed teams, business process re-engineering, virtual and learning organisations etc. in order to build their concept of Future Work (italics by the authors). The problem is, there is nothing new in this book, and quotes from literature make up a considerable part of the 274 pages this book consists of. In addition there is a lot of redundancy in addition to the introductions and executive summaries of each chapter. What is more, the language used is unnecessarily tangled and tricky. A good editor should have been able to shave away dozens of pages without removing any actual content.

The concept of organisational metalanguage might have been interesting, had it been discussed in detail, but now it felt just like an addendum located at the end of the book. Now it just makes the reader confused if he manages to proceed that far.

1. WORKING TOWARDS THE FUTURE

The opportunities Birchall and Lyons describe are to be found at the intersection of three drivers for change: Information technology, people at work (detachment from working at specific times and in fixed locations) and business strategy (managing IT and people at work).

2. THE EMERGING FUTURE ORGANIZATION

The trip-wire into a new era was triggered sometime in the late 1980’s by a change in the relationship between business needs and the ability of information technology to meet them. In the past, there had always been a positive gap between the needs of the business and what IT could offer. Businesses were striving for increased efficiency and effectiveness. But now we live in the “Era of the Negative Gap” in which the needs of a typical business may fall below the potential that IT has to offer. While IT in the past was catching up with business, today business has to catch up with IT. This Negative Gap contains opportunities that have not yet been taken.

The organisational implications of computers and communications technologies are:

• Efficiency: They dramatically shrink the time required to do certain work.
• Memory: Information storage and retrieval technologies enable us to record, to never forget and to quickly recover information.
• Effectiveness: They can be used to rapidly get information exactly where it is needed. It may remove the need for certain work to be done in fixed locations.
• They can be configured to enhance the capacity for the organisation to service its customers, work in partnership with its suppliers, improve the working environment, and improve the environment and quality of life.
• There are costs and risks involved both in adopting and not adopting these technologies.
• Disintermediation: In some industries it is possible to completely cut out the middle man.

The where and when of doing work is rooted in the past. After the industrial revolution it was sensible to anchor most work around the factory floor as most of the information needed to process office work was readily to hand. But today factories that produce the goods or services are far distant from the floors of prestigious office buildings of town centres. There is also a recognition of “knowledge workers”, whose total added value is in the intelligence. They are examples of location-independent workers.

A virtual organisation is the ultimate results-centred enterprise. It is able to produce results that are at least equal to those of its traditional competitors with a smaller asset base:
• Virtual assets in new places of work where fixed capital costs have been substituted for variable costs.
• Virtual employees, who do not need to be physically located in a central office.
• Time zone shifting, where the resource of time seems to expand or shrink at will.

1. THE COMPANY AND ITS EMERGING BOUNDARIES

The assumptions and beliefs upon which organisations have been shaped apply less and less. One symptom of this is “boundary erosion” like outsourcing and customer care both within and between organisations.

A corporation is a familiar legal and accountable entity that has a set of ground rules. Its “legal personality” has separated it from the rest of the world to make it a neatly accountable entity. A set of rules, such as a law, determines who or what is to be found inside the corporation. But creating “tomorrow’s organisation” requires a radical reappraisal of some fundamental taxonomies in and around the organisation. The two strategic groupings are Industries as collections of suppliers, and Markets as collections of customers. What is an organisation? What is a product? What is a customer? If frequently occurs that a particular organisation may be a customer, competitor and partner at the same time.

In past a power shift separated owners from the directors and managers of businesses. The increasing number of knowledge-workers may herald a new power shift that empowers individuals to manage themselves. The question of “ownership” by the company of the individual, in the form of the popular employment contract comes under question2. Power is shifting from a small number of massive institutions towards the massive number of individual people. This may lead to consumerisation of work; that is, individual workers question current assumptions about how work is to be done. That may result in a trend towards a more self-managed organisation. But will it be possible to populate organisations with people having the appropriate knowledge, competencies, and skills required by the newly emerging organisational forms?

There are several boundaries within organisation that have to be addressed to create tomorrow’s organisations:
• Authority boundary: Who is in charge of what? • Task boundary: Who does what?
• Political boundary: What’s in it for us?
• Identity boundary: Who is, and isn’t “us”?
• Career boundary: What is my profession?
• Outsourcing boundary: What is done by us?
• Geographical taxonomy: Where is it done?

1. NETWORKING: THE FUTURE ORGANIZATION FORM

Personal networks can be formal and informal and there have always been tensions between the resulting formal and informal organisations. Nevertheless it is recognised that without its informal networks the organisation would not be able to function.

At the level of the organisation, businesses maintain networks of suppliers and customers. Traditionally these relations have been based on a high level of trust and co-operation. As a result of intensified competition these relations have tended to become adversarial. But despite this tendency some companies have maintained strong relationships, partnerships that have improved overall performance. Such a networked organisation has two components. The first is the technology infrastructure, which allows the transfer of information. The second component is the social aspect, the people on the network and how they use it to interact.

Electronic communications enable the creation and maintenance of networks with ease and at low cost. Electronic data interchange (EDI) is revolutionising the way of operating between businesses. Many organisations are taking the opportunity to review what actual business they wish to be in, focus on core activity and manage non-core elements by contracting work to a network of suppliers. This leads to development of a complex web of relationships, which can be described as a networked organisation. The network will be in a constant state of flux, adjusting to the changing needs as it services its dynamic customer base.

Electronic communication allows speedy dialogue across the network, opening up the possibility of interactions between all the actors involved. These communication practices are likely to lead to fundamental questioning of the assumptions underlying organisational structures and working practices.

Birchall and Lyons offer three examples of networked organisational structures that are applicable in different environments.

• Type 1 – JIT communication in a stable network organisation. A core firm linked to a limited number of carefully selected partners. Transmission of formatted information between points in the network. Focus on improving efficiency and reduction of lead-time between identification of need and delivery of goods. A major cause of failure is a tendency to allow suppliers to concentrate too much on supplying the core firm and losing the competitive edge.
• Type 2 – A connected community forming a dynamic network. Application of both one-to-one and one-to-group systems (groupware). Introduction of new ways of working. Time and place independent team members. Ultimately a virtual network. There is potential for failure if the technology fails to provide an adequate system to support the planned development. Effort has to be put into maintaining the network as a business and social entity in order to face f.ex. culture clashes.
• Type 3 – Management of non-core activities of the internal network. Formation of constellation of suppliers and customers in order to be flexible and responsive. The hub of the network forms the knowledge-based enterprise. Prone to corporate interventions that may distort price mechanisms or the flow of resources.

Many networked organisations are not seeking to provide a new medium of communication to enable people “to do more of the same”, but rather “to find new things to do”. Additional shifts influence power and influence structures within the organisation. Employees may well be able to piece together more about the company than management would see as desirable. Network-based communications will require management to change behaviour and to create new strategies for managing communicates if the full benefits are to be realised. They can use the systems to become more visible and to increase the effectiveness of their own communications.

1. MAXIMIZING PRODUCTIVITY IN THE INFORMATION AGE

While technology has made it possible to disconnect the place and time of work from the point at which the output is needed, institutions are built around outmoded concepts. In addition to teleworking and f.ex. working on customer premises, work can be moved around the world in order to find the required competencies at minimum cost.

In many cases the change is driven by the desire to cut overheads such as the cost of premises or travel time. Additional drivers include outsourcing non-core activities and employees that want to redraw the boundaries around the location and time of work.

There are several hurdles to overcome in order to build a more mobile workforce:
• Culture: If the organisational culture is not prepared to work this way and is very hierarchical and bureaucratic, it may not be ready for such a move.
• Involvement: The staff, including the management is to be involved in the process of design and implementation of the change.
• Understanding: It is essential that mobile employees are clear about the organisation’s requirements. These need to be specified in terms of what is to be achieved rather that how it is to be done. In addition they have to know what they can expect from the organisation in the way of support and supervision.
• Organisational technology: The organisation has to have appropriate technological capability and infrastructure.
• Employee technology: The mobile workers have to have adequate technology and technical support available for them.
• Compensation: Employees have to feel that the personal benefits out-weight the costs both short and long term.

1. HIGH PERFORMANCE DISTRIBUTED TEAMS

To meet the new challenges, staff is to be deployed differently, coming together into task forces to achieve the needs. Work is of a project nature with clearly defined end goals, procedures and resources.

“A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.”

So the skills needed for the team to be effective go beyond those required for success on the technical aspects of their task. In addition to technical or functional skills, team members also need to have group problem-solving and decision-making as well as interpersonal skills.

Probably the most important prerequisite for teamworking is the ability to communicate effectively within the team. The second prerequisite is accurate and timely information to support the team. The third is to be able to communicate with the external world. Fourthly, team performance is determined by the quality of the group interaction process. Different technologies can be applied to support working of distributed teams:
• Internal communication: teleconferencing, video conferencing, fax, e-mail, BBS, computer conferencing, voice-mail, groupware.
• Retrieval of information: database access, search facilities, expert systems.
• External communication: same as internal communication plus telephone.
• Structuring group task performance: Group performance support systems.

In designing a distributed team there are four areas to consider:
1. The purpose of the team and success criteria.
2. The make-up of the team.
3. The design of the technical infrastructure to support the team.
4. The process of team development.

The authors assume that appropriately empowered teams are more likely to be high performing than those subjected to closer supervision. The aim is to create teams with a rather different working atmosphere to that found in many traditional groups. The behaviours sought include:
• Members will benefit most from mutual support.
• A commitment to team goals.
• Free discussion of ideas.
• A working atmosphere of openness and trust.
• Free sharing of members’ views.
• Encouragement to ask questions.
• Encouragement to seek training and development.
• Conflict is seen as a healthy way to resolve issues.
• Participation in decision making.

1. LEARNING IN ORGANISATIONS

New style organisations demand more capability from their workforce but at the same time employees expect their employers to provide them with better opportunities to upgrade skills and qualifications. In order to address organisational learning, the authors apply Jashapara’s three levels of learning:
• Focused organisational learning – Ability of the organisation to develop strategies and tactics to respond to the changing environment and for members to learn collectively. Networking technologies can support information dissemination but there is danger of an overload.
• Focused team learning – Particularly important in project environment. Related to individual learning, f.ex observation and reflection take place collectively instead of individually. Team members will also learn from each other.
• Focused individual learning – For effective learning to take place at the individual level it is essential to foster an environment where individuals are encouraged to take risks and experiment and where mistakes are tolerated.

In addition they quote Kolb’s learning cycle to address individual learning: (1) Concrete experience (2) Observation and reflection (3) Formation of concepts and generalisations (4) Development of hypotheses, which are texted in future action, leading to new experiences. In addition to acquiring knowledge and understanding, the subject undergoes changes in attitude and develops skills of learning how to learn.

Personal competence is those qualities that the individual brings to the job in order to perform its various aspects at the required standard of performance. But individual competence is just one factor in achieving the state of suitably adaptive organisation. The four components that lead to effective behaviour are knowledge, skills, motivation, and opportunities.

Asking the following questions can identify organisation’s core competence:
1. Is it a significant source of competitive differentiation?
2. Does it transcend a single business covering a range of businesses both current and new?
3. Is it hard for competitors to imitate?

Core competence is, in part, the accumulated wisdom of those within the organisation, its memory, and those to whom the organisation has access. But it also includes the technologies to which the organisation has access as well as the ability of the organisation to share knowledge and understanding across organisation boundaries. Most importantly, it is the distinctive competence, which the organisation marshals to enable it to outperform competition.

Competence = technology * governance process * collective learning

Technology solutions to support development of individual competence (learning) may be classified according to interaction and synchronisation:

Technology can support team learning in several ways. Unfortunately the list provided by the authors under the heading does not address learning as such but enhancements of team performance.

Technology can support organisational learning. For example groupware can be used to share tools and techniques and information across a global organisation. In order to avoid information overload, timely and usable filtering and retrieving functionality has to be built into the system.

However, as organisational learning depends upon development of shared mental models and attempts to change basic understanding of things, many face-to-face efforts are required. The loss of media richness induced by technological communication will result in sharing being superficial and many misunderstanding which result in limited constructive impact on personal mental models.

Another area where technology can be deployed to assist and develop mental models is computerbased simulation.

1. APPROACHING FUTURE WORK

The ability to recite the business imperative throughout the design and implementation of change is a factor that is critical success. The transformation programme must be seeded then launched from within a traditional organisation. It is within the traditional organisation that the work on planning has to be justified, budgeted and performed. A cross functional home is needed for the change from within the organisational host.

Pressures on the emerging organisation:
1. Maintaining current levels of business.
2. Designing and planning the change.
3. Implementing and learning from the change.

In order to establish a business imperative it is necessary to translate IT-enabled work practices into a strategic statement. A relationship has to be established between the concepts and strategic benefits.

1. MANAGING THE TRANSFORMATION TO FUTURE WORK

At times of a major change, conflict will seem to swell. The key role of the change-manager is to appropriately introduce and manage the conflict that will guide the company towards its better future. Change-management is sociotechnical in nature. It requires a combination of theoretical approach and sensitive change-managers. As an organisation is more than a set of processes, to transform an organisation requires us to recognise and incorporate a wider range of factors into our thinking. For any major change to stand a chance two ingredients are vital: intellect together with committed executive leadership.

Developing the context of the organisation is another change management idea that many will regard as unusual. Activities in the environment are often overlooked or regarded as irrelevant, unworkable or impossible. A more modern and holistic approach will recognise the need for lobbying, i.e., managing the context of the organisation.

Some design rules for change-management:
• Inform then implement.
• Establish a learning culture for change.
• Use stepping-stones where necessary in order to learn cross impact and to manage conflict.
• The business imperative is the ultimate taxonomy.

There are two kinds of learning in organisations. One type is needed essentially to implement a single change programme. The other type of on-going learning will demand to be placed in tomorrow’s normative culture-zone.
The introduction of future work into the traditional organisation will typically follow four stages:
1. Introduction of the topic at the senior level in the organisation.
2. Making the decision whether to introduce a future work programme.
3. Implementation.
4. The organisation will learn as it implements modify and adapt its behaviour.

(c) Copyright Jyrki J.J. Kasvi
www.knowledge.hut.fi/projects/itss/itssref.html

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